Building Banking’s Future While Carrying Technology’s Past

Banks named technology their top 2026 investment priority, voting with their wallets as advanced digital and data strategies drive change in the industry. Institutions are cleaning up obsolete code, consolidating and enhancing current capabilities, and anticipating investments in game-changing technologies as part of ongoing digital transformation efforts.

“Technical debt is anything that hinders a company from prosecuting its markets more aggressively or anything that shackles the engineering footprint,” said Ryan Lockard, principal in Deloitte’s engineering practice and head of engineering for the banking and capital markets segment.

Tech maintenance costs represent one clear measure of technical debt and broadly they are rising year over year at most banks, Lockard noted.

While not strictly betting the bank (h-hmm) on technology, institutions increasingly view tech transformation, agility and modernity as the path to differentiation and growth—and a journey of constant reinvention. It’s crucial for creating sustainable business value and satisfying a demanding customer.

With consequential technologies such as blockchain emerging and last year’s must-haves like Zero Trust cybersecurity still in implementation, deciding which capabilities deserve attention—and which to update—will be essential to charting a course for business, competition and customer satisfaction, industry professionals say.

“There’s an opportunity cost,” said one head of information security governance and risk management. “What features would you have to give up the time and cost for in order to upgrade out-of-date systems and infrastructure?” Importantly, he added, are the older systems so brittle that they present a security risk or prevent the company from building advanced technologies on top of them?

As technology rapidly advances, keeping up with the state of the art partly depends on banks’ ability to move on from the primitive parts of their tech footprint and redesign operations. And it means moving fast, before the newest technology replaces the newer technologies that banks are still studying.

Among 1,000 senior banking leaders surveyed in the ProSight Banking Outlook: 2026 Trends study, a majority (57%) named technology integration and platforms as a top-three investment priority this year. Half (50%) picked customer digital experience, and about a third (35%) chose fraud mitigation—both heavily technology dependent.

But transformation can be tricky without fixing the fundamentals first.

Cleaning Up: Data Disarray And Technical Debt

“Banks often aren’t spending their technology budgets on the hard problems,” Lockard said of the challenges banks face when balancing the obligations of retiring technical debt with building the next big thing. Competitive pressures force banks to “keep up with the Joneses” when developing new market-facing features and functionality, he said. This adds to maintenance burdens and kicks technical debt cleanup further down the road.

For an if-it’s-not-broken-don’t-fix-it industry still running critical processes on mainframe computers, removing technical debt can be a heavy lift, especially when these systems’ designers moved on long ago. Still, banks keep these monoliths, Lockard said, “because their biggest flaw is that they just keep working.”

Reverse engineering code is the easy part; understanding and recreating the systems’ intent and building stability and resiliency into their replacements are the primary goals when re-architecting for future development and operating needs.

Another critical issue financial institutions face can be a messy data house. A product of siloed systems, weak data governance and technology-led data management, the sometimes-chaotic state of banks’ data has made it harder to optimize AI and personalization capabilities—key ingredients in improving efficiency and creating fine-tuned services for consumers.

With the data dependencies of generative AI models, and the opportunities emerging to customize and personalize just-in-time customer services, banks are getting more serious about putting their data houses in order, experts say. In ProSight’s survey, banks said that the top way they could improve their customers’ experience is by making better use of data for product and service recommendations.

Consolidating: Customer Experience, Cybersecurity

For most, a better digital experience is the key to pleasing customers. In ProSight’s Consumer study, for instance, 58% of Generation Z respondents said they would switch financial services organizations for better mobile banking app and digital capabilities.

It’s an area where banks admit they’re falling short. More than half of the ProSight survey’s bank respondents described their digital customer experience as average or worse. And they cited digital as their biggest gap overall in customer experience, far underperforming in-person interactions.

Protecting customers’ information and accounts is a continued priority. Fraud fighting and new tools and tactics are on banks’ roadmaps, and new technology, again, can help. Among the top uses for generative AI at banks is fraud detection and prevention, a white-hat application of the technology to combat the rise in its black-hat uses by cybercriminals.

Cybersecurity was a leading risk in ProSight’s 2026 Chief Risk Officer Outlook Survey, with 74% of respondents citing it as a top-five risk, edging out second-place fraud. As threat actors change tactics, the industry must continually adapt and upgrade defenses, leading respondents to name cyber risk the second-most important emerging risk in the study. Implementing approaches such as Zero Trust security—based on the principle of “never trust, always verify” every user and device—is among the steps banks are taking to keep pace with ever-changing security threats.

Even then, visibility and control can be challenging as technology estates extend beyond internal systems. While vendors increasingly are a pathway to technical progress, they’re also a backdoor to risk. “We can spend a lot of time cyber protecting ourselves, but you need only one weak link and things can go really wrong,” said one big-bank CRO.

In areas such as model risk, improving contract language with vendors upfront can lead to better visibility into inputs and work practices and help banks better manage these third-party risks.

Enhancing: Path To Productive AI

More banks are using AI in their operations. The percentage of CRO survey respondents whose banks don’t use it or who didn’t know whether they used it declined to 24% in 2025 from 38% a year earlier. In every area of the institution the survey identified, bank use of AI increased year to year, with its application in internal modeling more than doubling to 47%. Its second-widest use is in identifying and reducing fraud (44%).

Coordinating efforts at the enterprise level, though, remains challenging, creating whack-a-mole conditions for governance teams as siloed groups test run their own applications. Banks are investing significant energy in categorizing AI use-case risk to manage the “avalanche” of innovation and clear the lowest-risk applications to go live.

Whether great expectations of efficiency and profitability for generative AI pan out remains unclear. Volatile market prices for AI-related providers’ stock recently illustrate wavering belief that returns will match frenzied spending—a “bubble” is what many now fear.

Meanwhile, the industry is rapidly advancing from generative AI to agentic AI, valued for its workflow orchestration and decision-making abilities. While generative AI is passive, relying on human prompts, agentic AI is proactive, taking initiative to help move work forward faster.

For banks, agentic AI can create capable “digital employees” that aren’t just workflow companions but autonomous doers, performing tasks independently. These agents can help clear technical debt—for example, remediating old code far faster than human teams.

Anticipating: Digital Assets, Blockchain, Quantum

While payment services are banks’ bread and butter, changing standards, upstart competitors and new payment rails are reshaping what had long been a basic offering. Institutions spent 2025 upgrading systems to meet the mandated ISO 20022 standard and hope to offer new services based on enhanced transaction data.

Meanwhile, fintechs and challenger banks continue to gain ground in payments through strong customer experience and personalization.

A potentially major shift is regulatory approval of stablecoin activity and growing support for blockchain-based financial networks. Banks must decide whether to issue stablecoins, join consortia, support ecosystems or pursue tokenized deposits.

SWIFT is piloting blockchain-based payments platforms for digital assets to enable real-time cross-border payments, which could complement existing bank rails.

Quantum computing also presents both opportunity and risk—offering immense processing power while potentially threatening encryption. Banks are encouraged to begin evaluating its implications now.

Closing Thoughts

As banks navigate digital transformation, their future depends on balancing innovation with remediation. Technical debt, disorganized data, and legacy systems consume resources, while technologies such as AI, blockchain, and quantum computing offer significant potential.

Institutions that modernize effectively, harness data, and adopt emerging tools with discipline will reduce risk and unlock new opportunities for growth and customer satisfaction. As Deloitte’s Lockard said: “Banks can’t shut down innovation to retire old technologies. They need to find ways to build resilience and harden their systems to more reliably and seamlessly onboard new technologies.”